Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to CBOE's Marketing Fee Program, 20411-20412 [2011-8631]

Download as PDF Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Notices 20411 SECURITIES AND EXCHANGE COMMISSION and (C) below, of the most significant aspects of such statements. transactions resulting from AIM and in open outcry. [Release No. 34–64212; File No. SR–CBOE– 2011–033] A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 2. Statutory Basis Self-Regulatory Organizations; Chicago Board Options Exchange, Incorporated; Notice of Filing and Immediate Effectiveness of Proposed Rule Change Relating to CBOE’s Marketing Fee Program April 6, 2011. Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’),1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 31, 2011, Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or the ‘‘Exchange’’) filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Exchange has designated this proposal as one establishing or changing a due, fee, or other charge imposed by CBOE under Section 19(b)(3)(A)(ii) of the Act 3 and Rule 19b–4(f)(2) thereunder,4 which renders the proposal effective upon filing with the Commission. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change Chicago Board Options Exchange, Incorporated (‘‘CBOE’’ or ‘‘Exchange’’) proposes to amend its Fees Schedule and specifically make certain changes to its Marketing Fee Program. The text of the proposed rule change is available on the Exchange’s Web site (https:// www.cboe.org/legal), at the Exchange’s Office of the Secretary and at the Commission. srobinson on DSKHWCL6B1PROD with NOTICES II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, CBOE included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. CBOE has prepared summaries, set forth in sections (A), (B), U.S.C. 78s(b)(1). CFR 240.19b–4. 3 15 U.S.C. 78s(b)(3)(A)(ii). 4 17 CFR 240.19b–4(f)(2). 1. Purpose CBOE proposes to amend its Marketing Fee Program to extend for an additional three months a pilot program it implemented on December 1, 2010, relating to the assessment of the marketing fee in the SPY option class.5 Specifically, CBOE previously determined not to assess the marketing fee on electronic transactions in SPY options, except that it would continue to assess the marketing fee on electronic transactions resulting from its Automated Improvement Mechanism (‘‘AIM’’) pursuant to CBOE Rule 6.74A and transactions in open outcry. This pilot program is scheduled to terminate on March 31, 2011, and CBOE now proposes to extend it until June 30, 2011. As CBOE stated in its rule filing establishing this three month pilot program, this proposed change is intended to attract more customer volume to the Exchange in this option class and to allow CBOE market-makers to better compete for order flow. CBOE noted that the SPY option class is unique in the manner in which it trades and is one of the most active option classes. CBOE also noted that DPMs and Preferred Market-Makes [sic] can utilize the marketing fee funds to attract orders from payment accepting firms that are executed in AIM and in open outcry. Finally, CBOE noted that it believes that the marketing fee funds received by payment accepting firms may be used to offset transaction and other costs related to the execution of an order in AIM and in open outcry, including in the SPY option class. For the reasons noted above, CBOE believes that it would make sense to extend the pilot program until June 30, 2011. CBOE believes that it is beneficial to continue to assess the fee on the limited bases as proposed and will continue to enable CBOE to compete for order flow in the SPY option class. However, because the SPY option class is unique in the manner in which it trades and is one of the most active option classes, CBOE would like to continue to evaluate for an additional three months the effect of not assessing the fee on all electronic transactions in the SPY option class, except for 1 15 2 17 VerDate Mar<15>2010 18:00 Apr 11, 2011 5 See Securities Exchange Act Release No. 63470 (December 8, 2010), 75 FR 78284 (December 15, 2010) (SR–CBOE–2010–108). Jkt 223001 PO 00000 Frm 00107 Fmt 4703 Sfmt 4703 The proposed rule change is consistent with Section 6(b) of the Securities Exchange Act of 1934 (the ‘‘Act’’),6 in general, and furthers the objectives of Section 6(b)(4) 7 of the Act, in particular, in that it is designed to provide for the equitable allocation of reasonable dues, fees, and other charges among Trading Permit Holders in that it is intended to attract more customer volume on the Exchange in SPY options. The SPY option class is one of the most active and liquid classes and trades with a significant electronic trading volume. Because of its current trading profile, CBOE believes it might be better able to attract electronic liquidity by not assessing the marketing fee on electronic SPY transactions and therefore proposes to extend the current waiver. However, CBOE believes that continuing to collect the marketing fee on open outcry transactions, as well as electronic orders submitted to AIM for price improvement, from market makers that trade with customer orders from payment accepting firms would continue to attract liquidity in SPY to the floor and AIM mechanism, respectively. Accordingly, CBOE believes continuing the waiver is equitable because it reflects the trading profile of SPY and is designed and intended to attract additional order flow in SPY to the Exchange, which would benefit all trading permit holders. B. Self-Regulatory Organization’s Statement on Burden on Competition CBOE does not believe that the proposed rule change will impose any burden on competition that is not necessary or appropriate in furtherance of [sic] purposes of the Act. C. Self-Regulatory Organization’s Statement on Comments on the Proposed Rule Change Received From Members, Participants, or Others No written comments were solicited or received with respect to the proposed rule change. III. Date of Effectiveness of the Proposed Rule Change and Timing for Commission Action Because the foregoing proposed rule change establishes or changes a due, fee, or other charge imposed by the Exchange, it has become effective pursuant to Section 19(b)(3)(A) of the 6 15 7 15 E:\FR\FM\12APN1.SGM U.S.C. 78f(b). U.S.C. 78f(b)(4). 12APN1 20412 Federal Register / Vol. 76, No. 70 / Tuesday, April 12, 2011 / Notices Act 8 and subparagraph (f)(2) of Rule 19b–4 9 thereunder. At any time within 60 days of the filing of the proposed rule change, the Commission summarily may temporarily suspend such rule change if it appears to the Commission that such action is necessary or appropriate in the public interest, for the protection of investors, or otherwise in furtherance of the purposes of the Act. IV. Solicitation of Comments Interested persons are invited to submit written data, views, and arguments concerning the foregoing, including whether the proposed rule change is consistent with the Act. Comments may be submitted by any of the following methods: information from submissions. You should submit only information that you wish to make available publicly. All submissions should refer to File Number SR–CBOE–2011–033 and should be submitted on or before May 3, 2011. For the Commission, by the Division of Trading and Markets, pursuant to delegated authority.10 Cathy H. Ahn, Deputy Secretary. [FR Doc. 2011–8631 Filed 4–11–11; 8:45 am] BILLING CODE 8011–01–P SECURITIES AND EXCHANGE COMMISSION srobinson on DSKHWCL6B1PROD with NOTICES Electronic Comments • Use the Commission’s Internet comment form (https://www.sec.gov/ rules/sro.shtml); or • Send an e-mail to rulecomments@sec.gov. Please include File Number SR–CBOE–2011–033 on the subject line. [Release No. 34–64208; File No. SR–NSX– 2011–02] Paper Comments • Send paper comments in triplicate to Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 F Street, NE., Washington, DC 20549–1090. All submissions should refer to File Number SR–CBOE–2011–033. This file number should be included on the subject line if e-mail is used. To help the Commission process and review your comments more efficiently, please use only one method. The Commission will post all comments on the Commission’s Internet Web site (https://www.sec.gov/ rules/sro.shtml). Copies of the submission, all subsequent amendments, all written statements with respect to the proposed rule change that are filed with the Commission, and all written communications relating to the proposed rule change between the Commission and any person, other than those that may be withheld from the public in accordance with the provisions of 5 U.S.C. 552, will be available for Web site viewing and printing in the Commission’s Public Reference Room on official business days between the hours of 10 a.m. and 3 p.m. Copies of such filing also will be available for inspection and copying at the principal office of CBOE. All comments received will be posted without change; the Commission does not edit personal identifying April 6, 2011. Self-Regulatory Organizations; National Stock Exchange, Inc.; Notice of Filing and Immediate Effectiveness of Proposed Rule Change To Amend the NSX Fee and Rebate Schedule and NSX Rule 16.4 Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 (‘‘Act’’) 1 and Rule 19b–4 thereunder,2 notice is hereby given that on March 29, 2011, National Stock Exchange, Inc. filed with the Securities and Exchange Commission (‘‘Commission’’) the proposed rule change as described in Items I and II below, which Items have been prepared by the Exchange. The Commission is publishing this notice to solicit comments on the proposed rule change from interested persons. I. Self-Regulatory Organization’s Statement of the Terms of Substance of the Proposed Rule Change The National Stock Exchange, Inc. (‘‘NSX® ’’ or the ‘‘Exchange’’) is proposing a rule change, operative at commencement of trading on April 1, 2011, which proposes to amend the NSX Fee and Rebate Schedule (the ‘‘Fee Schedule’’) to adjust certain liquidity taking rebates and fees in the Automatic Execution Mode of order interaction, eliminate the Exchange’s market data rebate in the Order Delivery Mode of order interaction and establish an exchange regulatory fee. The text of the proposed rule change is available on the Exchange’s Web site at https://www.nsx.com, at the principal office of the Exchange, and at the Commission’s Public Reference Room. 10 17 CFR 200.30–3(a)(12). U.S.C. 78s(b)(1). 2 17 CFR 240.19b–4. 8 15 U.S.C. 78s(b)(3)(A). 9 17 CFR 240.19b–4(f)(2). VerDate Mar<15>2010 18:00 Apr 11, 2011 1 15 Jkt 223001 PO 00000 Frm 00108 Fmt 4703 Sfmt 4703 II. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change In its filing with the Commission, the Exchange included statements concerning the purpose of and basis for the proposed rule change and discussed any comments it received on the proposed rule change. The text of these statements may be examined at the places specified in Item IV below. The Exchange has prepared summaries, set forth in sections A, B, and C below, of the most significant aspects of such statements. A. Self-Regulatory Organization’s Statement of the Purpose of, and Statutory Basis for, the Proposed Rule Change 1. Purpose With this rule change, the Exchange is proposing to modify the Fee Schedule and related text of Rule 16 in four respects. First, the proposed rule change would increase the highest rebate, and adjust the tier thresholds, for liquidity adding displayed orders in the Automatic Execution Mode of order interaction (‘‘AutoEx’’) 3 priced at least one dollar. Certain conforming changes are also proposed for rebates for liquidity adding Zero Display Orders 4 in AutoEx priced at least one dollar. Second, the proposed rule change would eliminate the $0.0028 taker fee on orders that take liquidity in AutoEx for securities one dollar and above. Third, the proposed rule change would eliminate the market data revenue rebate currently available in the Order Delivery Mode of order interaction (‘‘Order Delivery’’). Finally, the proposed rule change would establish a monthly exchange regulatory fee. Each of the proposed changes is further addressed below. AutoEx Liquidity Adding Rebate for Securities Priced at Least One Dollar Currently, for displayed orders in securities priced one dollar and above that provide liquidity in AutoEx, the Fee Schedule provides a (‘‘Tier 1’’) rebate of $0.0026 per share if an ETP Holder’s liquidity adding average daily volume (as such term is defined in Endnote 3 of the Fee Schedule, ‘‘Liquidity Adding ADV’’) is less than 20 basis points of Total Consolidated Average Daily Volume (as defined in Endnote 13 of the Fee Schedule, 3 The Exchange’s two modes of order interaction are described in NSX Rule 11.13(b). 4 ‘‘Zero Display Orders’’ means ‘‘Zero Display Reserve Orders’’ as specified in NSX Rule 11.11(c)(2)(A). E:\FR\FM\12APN1.SGM 12APN1

Agencies

[Federal Register Volume 76, Number 70 (Tuesday, April 12, 2011)]
[Notices]
[Pages 20411-20412]
From the Federal Register Online via the Government Printing Office [www.gpo.gov]
[FR Doc No: 2011-8631]



[[Page 20411]]

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-64212; File No. SR-CBOE-2011-033]


Self-Regulatory Organizations; Chicago Board Options Exchange, 
Incorporated; Notice of Filing and Immediate Effectiveness of Proposed 
Rule Change Relating to CBOE's Marketing Fee Program

April 6, 2011.
    Pursuant to Section 19(b)(1) of the Securities Exchange Act of 1934 
(``Act''),\1\ and Rule 19b-4 thereunder,\2\ notice is hereby given that 
on March 31, 2011, Chicago Board Options Exchange, Incorporated 
(``CBOE'' or the ``Exchange'') filed with the Securities and Exchange 
Commission (``Commission'') the proposed rule change as described in 
Items I and II below, which Items have been prepared by the Exchange. 
The Exchange has designated this proposal as one establishing or 
changing a due, fee, or other charge imposed by CBOE under Section 
19(b)(3)(A)(ii) of the Act \3\ and Rule 19b-4(f)(2) thereunder,\4\ 
which renders the proposal effective upon filing with the Commission. 
The Commission is publishing this notice to solicit comments on the 
proposed rule change from interested persons.
---------------------------------------------------------------------------

    \1\ 15 U.S.C. 78s(b)(1).
    \2\ 17 CFR 240.19b-4.
    \3\ 15 U.S.C. 78s(b)(3)(A)(ii).
    \4\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

I. Self-Regulatory Organization's Statement of the Terms of Substance 
of the Proposed Rule Change

    Chicago Board Options Exchange, Incorporated (``CBOE'' or 
``Exchange'') proposes to amend its Fees Schedule and specifically make 
certain changes to its Marketing Fee Program. The text of the proposed 
rule change is available on the Exchange's Web site (https://www.cboe.org/legal), at the Exchange's Office of the Secretary and at 
the Commission.

II. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

    In its filing with the Commission, CBOE included statements 
concerning the purpose of and basis for the proposed rule change and 
discussed any comments it received on the proposed rule change. The 
text of these statements may be examined at the places specified in 
Item IV below. CBOE has prepared summaries, set forth in sections (A), 
(B), and (C) below, of the most significant aspects of such statements.

A. Self-Regulatory Organization's Statement of the Purpose of, and 
Statutory Basis for, the Proposed Rule Change

1. Purpose
    CBOE proposes to amend its Marketing Fee Program to extend for an 
additional three months a pilot program it implemented on December 1, 
2010, relating to the assessment of the marketing fee in the SPY option 
class.\5\ Specifically, CBOE previously determined not to assess the 
marketing fee on electronic transactions in SPY options, except that it 
would continue to assess the marketing fee on electronic transactions 
resulting from its Automated Improvement Mechanism (``AIM'') pursuant 
to CBOE Rule 6.74A and transactions in open outcry. This pilot program 
is scheduled to terminate on March 31, 2011, and CBOE now proposes to 
extend it until June 30, 2011.
---------------------------------------------------------------------------

    \5\ See Securities Exchange Act Release No. 63470 (December 8, 
2010), 75 FR 78284 (December 15, 2010) (SR-CBOE-2010-108).
---------------------------------------------------------------------------

    As CBOE stated in its rule filing establishing this three month 
pilot program, this proposed change is intended to attract more 
customer volume to the Exchange in this option class and to allow CBOE 
market-makers to better compete for order flow. CBOE noted that the SPY 
option class is unique in the manner in which it trades and is one of 
the most active option classes. CBOE also noted that DPMs and Preferred 
Market-Makes [sic] can utilize the marketing fee funds to attract 
orders from payment accepting firms that are executed in AIM and in 
open outcry. Finally, CBOE noted that it believes that the marketing 
fee funds received by payment accepting firms may be used to offset 
transaction and other costs related to the execution of an order in AIM 
and in open outcry, including in the SPY option class.
    For the reasons noted above, CBOE believes that it would make sense 
to extend the pilot program until June 30, 2011. CBOE believes that it 
is beneficial to continue to assess the fee on the limited bases as 
proposed and will continue to enable CBOE to compete for order flow in 
the SPY option class. However, because the SPY option class is unique 
in the manner in which it trades and is one of the most active option 
classes, CBOE would like to continue to evaluate for an additional 
three months the effect of not assessing the fee on all electronic 
transactions in the SPY option class, except for transactions resulting 
from AIM and in open outcry.
2. Statutory Basis
    The proposed rule change is consistent with Section 6(b) of the 
Securities Exchange Act of 1934 (the ``Act''),\6\ in general, and 
furthers the objectives of Section 6(b)(4) \7\ of the Act, in 
particular, in that it is designed to provide for the equitable 
allocation of reasonable dues, fees, and other charges among Trading 
Permit Holders in that it is intended to attract more customer volume 
on the Exchange in SPY options. The SPY option class is one of the most 
active and liquid classes and trades with a significant electronic 
trading volume. Because of its current trading profile, CBOE believes 
it might be better able to attract electronic liquidity by not 
assessing the marketing fee on electronic SPY transactions and 
therefore proposes to extend the current waiver. However, CBOE believes 
that continuing to collect the marketing fee on open outcry 
transactions, as well as electronic orders submitted to AIM for price 
improvement, from market makers that trade with customer orders from 
payment accepting firms would continue to attract liquidity in SPY to 
the floor and AIM mechanism, respectively. Accordingly, CBOE believes 
continuing the waiver is equitable because it reflects the trading 
profile of SPY and is designed and intended to attract additional order 
flow in SPY to the Exchange, which would benefit all trading permit 
holders.
---------------------------------------------------------------------------

    \6\ 15 U.S.C. 78f(b).
    \7\ 15 U.S.C. 78f(b)(4).
---------------------------------------------------------------------------

B. Self-Regulatory Organization's Statement on Burden on Competition

    CBOE does not believe that the proposed rule change will impose any 
burden on competition that is not necessary or appropriate in 
furtherance of [sic] purposes of the Act.

C. Self-Regulatory Organization's Statement on Comments on the Proposed 
Rule Change Received From Members, Participants, or Others

    No written comments were solicited or received with respect to the 
proposed rule change.

III. Date of Effectiveness of the Proposed Rule Change and Timing for 
Commission Action

    Because the foregoing proposed rule change establishes or changes a 
due, fee, or other charge imposed by the Exchange, it has become 
effective pursuant to Section 19(b)(3)(A) of the

[[Page 20412]]

Act \8\ and subparagraph (f)(2) of Rule 19b-4 \9\ thereunder. At any 
time within 60 days of the filing of the proposed rule change, the 
Commission summarily may temporarily suspend such rule change if it 
appears to the Commission that such action is necessary or appropriate 
in the public interest, for the protection of investors, or otherwise 
in furtherance of the purposes of the Act.
---------------------------------------------------------------------------

    \8\ 15 U.S.C. 78s(b)(3)(A).
    \9\ 17 CFR 240.19b-4(f)(2).
---------------------------------------------------------------------------

IV. Solicitation of Comments

    Interested persons are invited to submit written data, views, and 
arguments concerning the foregoing, including whether the proposed rule 
change is consistent with the Act. Comments may be submitted by any of 
the following methods:

Electronic Comments

     Use the Commission's Internet comment form (https://www.sec.gov/rules/sro.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number SR-CBOE-2011-033 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number SR-CBOE-2011-033. This file 
number should be included on the subject line if e-mail is used. To 
help the Commission process and review your comments more efficiently, 
please use only one method. The Commission will post all comments on 
the Commission's Internet Web site (https://www.sec.gov/rules/sro.shtml). Copies of the submission, all subsequent amendments, all 
written statements with respect to the proposed rule change that are 
filed with the Commission, and all written communications relating to 
the proposed rule change between the Commission and any person, other 
than those that may be withheld from the public in accordance with the 
provisions of 5 U.S.C. 552, will be available for Web site viewing and 
printing in the Commission's Public Reference Room on official business 
days between the hours of 10 a.m. and 3 p.m. Copies of such filing also 
will be available for inspection and copying at the principal office of 
CBOE. All comments received will be posted without change; the 
Commission does not edit personal identifying information from 
submissions. You should submit only information that you wish to make 
available publicly. All submissions should refer to File Number SR-
CBOE-2011-033 and should be submitted on or before May 3, 2011.
---------------------------------------------------------------------------

    \10\ 17 CFR 200.30-3(a)(12).

    For the Commission, by the Division of Trading and Markets, 
pursuant to delegated authority.\10\
Cathy H. Ahn,
Deputy Secretary.
[FR Doc. 2011-8631 Filed 4-11-11; 8:45 am]
BILLING CODE 8011-01-P
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